Frequently Asked Questions for Homeowners
MANDATORY FTC DISCLOSURE
We are a for-profit company. C. J. West LLC and Foreclosure Brokers LLC are not associated with the government and our services are not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage you could lose your home and damage your credit rating.
IMPORTANT!
We
DO NOT provide the services of nor do
we act as bankruptcy counselors, attorneys, lenders, accountants,
financial planners, financial counselors, nor are we a debt relief
agency.
The content of our website is
not legal advice and represents our opinions only.
_____________________________________________________________________________
What does Foreclosure Brokers LLC do?
Foreclosure Brokers LLC is a Full Service
Real Estate Company specializing in helping sellers in distress
sell before foreclosure. In many cases, sellers need a
short sale to sell the property for less that what is owed and
we have full time negotiators who can reduce your mortgages for
the current value of your house so you can sell
without bringing thousands of dollars to the closing.
What is a short sale?
A short sale is when, through the sale of your
home, a lender voluntarily accepts less money than what is owed as
an alternative to foreclosure.
They agree to this because they know they will recover more
of their money sooner than if they take property back in foreclosure
and resell it as a lender owned property. Sometimes they allow
you to be released from the remaining liability and sometimes
they do not.
How will a short sale affect my credit?
Our goal is to keep a full “Foreclosure” off of
your credit report.
However, it’s likely that your account will show as “Settled” once a
short sale has occurred. The
most common negative marks on your credit will be the 30-60-90-120
day late mortgage payments and your credit score will reflect that.
If you have a 2nd mortgage, it may be charged off and it is likely
that your credit report will show that.
Read More
About Possible Consequences Here
What are the financial consequences of a
Short Sale?
Keep in mind that we are not accountants, tax
preparers or financial counselors. However, we do this full
time so we have a very good idea of what happens. The lenders have
several choices when they incur a loss on your loan:
1) They can write off the debt
and send you a 1099-c for the difference. The IRS views this
as a benefit to you and therefore treated as taxable income.
The Federal Government has put a hold on these "phantom taxes" until
2010 for certain situations. See the IRS websites:
Mortgage Debt Relief Act of 2007 and
Questions & Answers on Foreclosure and Debt Cancellation for
more information on this.
2) They try to collect the
difference from you after the sale is complete. Sometimes
they'll ask you to sign a promissory note, continue to make payments
or they will sell your debt to a collection agency. It is rare
for 1st mortgages and more common for 2nd mortgage lenders to do
this but they almost always have the right. Always seek the
advice of a local attorney about your specific situation.
3) They agree to the short sale
and will release their lien from your property but ask you to sign a
promissory note to payback part or all of the difference in
exchange. These are typically 0%, payable over several years
and can commonly be negotiated down or settled for a few thousand
dollars at closing.
Read More
About Possible Consequences Here
What are the benefits to a short sale vs.
walking away?
Because your lenders receive more money than they
would if the property goes all the way through foreclosure, the
difference between what you owe and what the lenders receive back
will be less in a short sale than through foreclosure.
Therefore, any deficiency amounts or amounts you could
potentially be liable for for will be less through a short sale than
through foreclosure.
Also, a short sale on your credit report is better
than a 'Foreclosure' and lending institutions are agreeing.
For example: Fannie Mae states that if you go through foreclosure
and they back the loan, you cannot get a new Fannie Mae backed loan
for 5 years but if you go through a short sale on a Fannie Mae loan,
they'll loan to you again in 2 years. See it here as a PDF:
Fannie Mae Guideline.
How much money can I receive from this
process?
Since the lender is receiving less than what they
are owed, they will not allow you to receive any money from the
transaction.
If you receive
money from the short sale when you lender will not allow it, is bank
fraud. Of course, we are
unwilling to commit bank fraud.
How much will a short sale cost me?
Although you cannot receive any money from the
proceeds of the sale, our goal is that you do not need to bring any
money to the closing either.
All fees, including our negotiation fee, real estate commissions, back
taxes and any other closing costs are paid from buyer and the
proceeds of the sale at closing. In some rare
instances, lenders will not allow past HOA dues to be included or a
2nd mortgage may ask for a little more than what is being offered to
release their lien. We make every effort to get his paid
through every other channel possible (buyers, brokers, lenders,
etc.) and only come back to ask you as a last resort.
You should always
work with your real estate broker in maintaining your property while
it is being marketed and this may cost money. Keeping up on utilities, water, landscaping/
grass cutting and snow removal can make a big impact on buyers
looking at your house.
Can I stay in the property after I do
a short sale?
No. Stay away from these at all costs!
Two big reasons are: 1) The lender will not allow you
to receive ANY benefit if they are taking a loss. Your
occupancy could be construed as a benefit and therefore bank fraud.
2) If you set up rent payments with the new buyer
and you stop making those payments, they would have no choice but to
evict you. Your 'angel' investor/ buyer would fall under
scrutiny for trying to protect themselves. This is the primary
source of "Foreclosure Rescue Scams" you hear about in the news.
Can you still help me if
I've filed bankruptcy ?
Yes and no. If the property is still in
active bankruptcy, it may be impossible. Because bankruptcy is federal
protection from creditors, your lenders are not allowed to discuss a
short sale with you or your agents until the bankruptcy is
discharged, dismissed, the court issues a relief from stay or the
bankruptcy trustee allows an abandonment of asset. Once the
property is out of the bankruptcy, we are finally able to help and
your lenders are able to speak with us again. We ask you
to voluntarily not file bankruptcy while we pursuing a short
sale.
How long does the process take?
We begin communicating with your lenders as soon
as we receive back your initial paperwork. However, your lender will
not “open the file” until a buyer is ready and has presented a
contract for purchase so marketing and finding a buyer is part of
the challenge. Our brokers are trained to market your property
aggressively so you can find a buyer fast.
Once the offer is presented to the bank(s) it can
take between 40-75+ days for a response and up to another 30 days
for the buyer to close. If your foreclosure sale date is approaching within this timeframe,
don’t worry, your lender will most likely postpone the sale date and
allow the buyer enough time to close assuming the offer is in the
ballpark.
How often do I get updates on my file?
We post weekly updates on our website and
as our client, you can call us anytime. We'll give you our
cell phone numbers so you are never in the dark. We are available
in the office and in person Monday through Friday, 9:00am -
5:00pm and are always happy to speak with you about
the status.
You can always:
How do I begin?
Fill out
the online form or call us (303-399-7484) to set up a telephone appointment in
which we will explain everything and answer all of your questions.
After our initial conversation, we will guide you in listing
your property and gathering your paperwork.
We send you our document checklist, an authorization to
release information, our engagement agreement and a required
financial form. Once we
receive these back from you, your file is officially “opened” with
us.
Call us if you have more questions - 303-399-7484.
